This is an update to my previous article, Summary of the Coronavirus Job Retention Scheme, published on 23rd Match 2020. It reflects the changes announced in the Chancellor’s statement on the 29th May 2020.

Changes to the scheme

Last week the government announced important changes to the Coronavirus Job Retention Scheme (CJRS) in an attempt to stimulate and sustain the economy as lockdown measures are eased.

Previously the CJRS or “furlough scheme” as many called it was cut and dried. An employee was either furloughed and unable to work or they weren’t. If they were furloughed the government paid 80% of their salary but there was no middle ground. The recent changes to the scheme are designed to lessen the economic impact on businesses that are trying to get back to work but with lower levels of demand for their services. For example, if you run a healthcare practice that is permitted to begin treating patients again and you have multiple employees that have previously been furloughed this could be highly relevant to you.

‘Flexible furloughing’ will come into effect from 1 July and it will allow you to bring back your furloughed employees on a part-time basis. If you do, it’s important to note that you will be responsible for paying their wages for the hours they work and the furlough scheme will cover their remaining (unworked) hours. So, if you have an employee that normally works 40 hours per week and you bring them back for 5 hours per week you will need to pay them for the 5 hours that they work. For the 35 hours that they are not working, they will be furloughed.

Further clarification is due on the 12th June but it’s also worth pointing out that if an employee comes back part-time the capped figures apply in proportion to the hours that they haven’t been worked. So, in the example above the employee hasn’t worked for 35 hours out of 40 (i.e. 87.5% of their normal working hours) so the caps (which are also going to reduce from August) will be reduced proportionately.

The changes and dates of implementation are summarised below:

  • June and July: The government will continue to pay 80% of wages, plus national insurance and pension contributions as it does now. Employers are not required to pay anything.
  • August: The government will pay 80% of wages, up to a cap of £2,500/mth. IMPORTANT: Employers will have to pay national insurance and pension contributions.
  • September: The government will pay 70% of wages, up to a cap of £2,190/mth. Employers will have to pay national insurance and pension contributions, and 10% of wages to make up 80% of the total, up to a cap of £2,500/mth.
  • October: The government will pay 60% of wages, up to a cap of £1,875/mth. Employers will then need to pay national insurance and pension contributions, and 20% of wages to make up 80% of the total, up to a cap of £2,500/mth.

Please remember you will need to reach new flexible furlough agreements with any furloughed employees brought back on a part-time basis.

More information on how the scheme will operate is expected to be announced on 12 June 2020.

Closure of the scheme

The Chancellor confirmed the closure of the scheme to new entrants from 30 June. After this point, employers will only be able to furlough employees who have been furloughed for three full weeks at any point before 30 June.

IMPORTANT: This means that the last day an employer can furlough an employee for the first time will be Wednesday 10 June 2020.

CJRS and record keeping.

The Chancellor has issued a new Direction to HMRC, updating the record-keeping requirements of the CJRS scheme. Under these requirements, the written agreement that the furloughed employee will, under the current terms of the scheme, cease all work must be retained until 30th June 2025 and:

  • State the main terms and conditions;
  • Be incorporated either expressly or implicitly in the contract of employment; and
  • Be either made or confirmed in writing.

As I’ve said previously, do bear in mind that this scheme is being administered by HMRC so I wouldn’t try anything cute. I’m sure some less scrupulous people will attempt to “game” the system but I suspect (just my opinion) that any companies taking advantage of the scheme will get a knock on their door at some point.


I’m only using official government sources to pull this information together whilst trying to making it easier to read and a bit more actionable. Here are the sources for this article:

GOV.UK – Covid-19: support for businesses
GOV.UK – Flexible Furloughing
GOV.UK – Self-Employment Income Support Scheme Factsheet


Please note this is our understanding of the legislation at the current time. As you will appreciate it is changing almost on a daily basis and we cannot be held responsible if advice and guidance changes or if our interpretation does not subsequently prove to be correct.


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